Debt Management Plans - Freezing Interest and Charges
One of the main benefits of undertaking a debt management plan is the potential to get your debt interest and any charges frozen.
How does this work?
Typically, a debt management company will negotiate with your creditors based on the proposed payments set out in your debt management plan. They will discuss payment arrangements on your behalf and, as it is in your creditors interests to receive a payment and finally settle the bill your debt management company will try to make this as short a time as possible, with the money available.
If a creditor continues to add charges and interest to an account, then the debt will take longer to settle, which is not in everyone’s best interest.
Creditors don’t have to freeze interest or charges but through negotiation with debt management companies they are more likely to do so as the debt management company work to ensure a regular monthly payment is made against the debt.
Once the interest and debt is frozen it will mean your debts can be settled more quickly than if they had interest added to the overall totals.
In some instances, there may be no damage to your credit rating, as some creditors will get payments close to what they were achieving.
If you are unsure as to whether you are suitable for a debt management plan, then we would recommend that you compare our debt management companies, contact them and see what advice they can provide.
